US Airways gets new offer for stake

LuisaBeltran

NEW YORK (CBS.MW) -- The Retirement Systems of Alabama made a rival offer Thursday for a stake in US Airways Group Inc., setting up a bidding war for control of the bankrupt airline.

The Alabama state pension fund bid $240 million for a 37.5 percent stake in a restructured US Airways
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The pension fund will not take transaction fees in the deal, CEO David Bronner told CBS.MarketWatch.com.

Texas Pacific, a private equity firm, offered $200 million for the US Airways stake in late July. The bid is conditioned on US Airways emerging from bankruptcy protection.

Arlington, Va.-based US Airways, the nation's seventh largest airline, confirmed Thursday that it received a letter from the Alabama pension fund but declined further comment. The troubled airline has received conditional approval for a federal loan guarantee of $900 million to $1 billion.

"US Airways will be a very good investment for whoever buys it over next three to five years," Bronner said. "The government loan keeps problems away from them for seven years."

The Alabama pension fund already owns about $340 million in US Airways debt, Bonner said. So far, only Texas Pacific and the Alabama pension fund have bid for the controlling stake in US Airways, Bronner said.

US Airways filed for Chapter 11 bankruptcy protection in August, the first major airline to seek bankruptcy protection since the Sept. 11 terrorist attack.

Shares of US Airways gained 3 cents, or 5.8 percent, to close at 55 cents Thursday.

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